A new report on the Directors’ and Officers’ (D&O) insurance market has highlighted increased regulatory scrutiny, growing litigation risks, and evolving market dynamics as key trends shaping 2025.
The Global Insurance Law Connect (GILC) D&O Global Trends 2025 report, which surveyed 24 markets worldwide, identifies legislation, environmental, social, and governance (ESG) issues, and macroeconomic uncertainty as the primary factors influencing underwriting decisions and pricing structures.
Regulatory Changes Drive Litigation Risks
The report suggests that claims against directors are being increasingly upheld, contributing to a rising demand for D&O insurance in both mature and developing markets.
Among surveyed professionals:
- 74% cited legislative and regulatory changes as the most significant market influence.
- 57% pointed to ESG considerations, reflecting their growing role in corporate governance.
- 52% highlighted macroeconomic instability as a major concern.
- 48% noted cyber risk as a factor impacting underwriting decisions.
Compared to 2021—when the market was still reacting to the aftermath of the COVID-19 pandemic—the focus has shifted. ESG, once a secondary concern, now plays a central role in underwriting and liability discussions, while regulatory pressures continue to mount.
Rising Claims and Increased Liability Exposure
The report underscores a sharp increase in litigation and regulatory claims against corporate directors.
- 61% of respondents reported a rise in litigation over the past five years.
- 55% observed that courts and regulators are now more likely to rule in favor of claimants.
This trend extends across both developed and emerging markets, reflecting a global shift toward heightened director accountability.
Pricing Trends: Market Maturity Shapes Premium Costs
Pricing trends remain highly dependent on market maturity.
- 62% of respondents reported an overall increase in D&O premiums.
- However, mature markets like the UK, Australia, Finland, and the Netherlands have seen premium declines due to market stabilization.
- In developing regions, political and economic uncertainty continues to push premium costs higher due to increased litigation risks.
Regulatory frameworks also influence pricing. For example, Chilean regulations restricting companies from covering directors’ policies have slowed market growth, while some mature markets have raised concerns about unsustainable pricing competition.
Industry leaders warn that some underwriting practices may be due for corrections, particularly as global M&A activity and economic shifts unfold in 2025.
Expanding Demand for D&O Insurance
Despite price variations, global demand for D&O insurance is on the rise.
- In Poland, small and medium-sized enterprises (SMEs) are increasingly purchasing D&O policies.
- In the Netherlands, there is growing uptake among non-profits and smaller businesses.
- China’s 2024 company law reforms have prompted the emergence of tailored D&O products for non-listed firms.
- In Greece, a combination of financial instability, regulatory changes, and corporate failures has led to higher demand for coverage.
Looking Ahead: What’s Next for the D&O Market?
As 2025 progresses, market conditions are expected to stabilize in some mature regions, while others may experience pricing fluctuations due to capacity adjustments and regulatory changes. The report suggests that global economic conditions and major elections will also play a key role in shaping the D&O insurance landscape.
How do you see the future of the D&O insurance market evolving? Share your thoughts in the comments.
